Madonna Would Be Proud of Us: Reinventing Financial Compliance for an Automated Future

By October 11, 2018 April 8th, 2019 Events, Trends and thoughts

If you’re as old as I am, then you have seen the so-called “Queen of Pop” reinvent herself very many times, since she first burst on to an unsuspecting world in the early eighties. She’s not alone, of course. Many public figures have reimagined themselves at critical points in their career.

Entertainers typically do it when the public’s tastes change, their stock-in-trade becomes “old hat” and they’re unable to sell records or fill theatres. Politicians do it when the electorate’s desires and priorities move on, or when world events demand a different approach. Industries have done it as technologies advance and consumer demands evolve.

Richard Branson’s Virgin started when he bought and sold vinyl records from a public telephone kiosk in 1970s London. Now he’s preparing to send well-heeled tourists into space from the Nevada desert!

The time is ripe for Financial Services Compliance to be reinvented too.

If you’re involved in the financial services world, or even if you only followed the news for the last 10 years, you’ll be only too aware of the travails that have beset the industry in recent times. Mis-selling, manipulation and meltdowns are words that spring to mind.

Governments and regulators have responded by tightening up regulations, restricting practices, and expanding the scope–and extent–of the data that must be captured, collected and stored. This is to discourage bad practices and provide vital evidence when things appear to be other than they should.

And yet the tools that are deployed to support this enhanced oversight have, for the most part, hardly moved on.

Surprisingly, they are still based on the call recording and email capture solutions that were in operation when the financial crisis hit us a decade ago. In other areas, compliance requirements have also been considerably augmented, none more so than in the personal data privacy arena, where the EU’s new General Data Protection Regulation (GDPR) seeks to engender an approach that reflects what technology is now capable of–and the dangers that lurk within.

GDPR was thought necessary because technology, and services based on it, are more far reaching than they used to be. However, the financial services industry continues to avoid many of the more useful technological innovations that could help it provide services fit for the 21st century.


Because the compliance solutions they have in place do not make it practical, or even legal, to use these innovations. For example, Unified Communications tools (such as Skype for Business), can considerably improve the quality of communication and decision-making. Such technology makes it so much easier for traders, back office support staff, counter parties (such as other traders) and clients to share information and collaborate in the fast-moving hot house they must operate in. Such software is widely available and easily deployed–and is widely used in other areas of commerce–and yet hardly at all in financial services.

Why? Because most firms do not have the tools needed to capture even simple activities, such as voice calls and instant messaging, channelled through such systems, let alone screen sharing, file transfer, video and more. And enforcing more complex requirements such as inter-party “Chinese walls” and compulsory disclaimers is even further away from reality.

Not anymore.

Very much the “new kid on the block”–proactive compliance capabilities don’t just capture all the new communication modes offered by Unified Communications tools. They also monitor interactions and automatically enforce communication and content policies in real time. This prevents regulatory breaches from occurring in the first place and effectively removes the need for “after-the-fact” compliance.

As part of the “three lines of defence” approach, such automated “ethical walls” and communications monitoring also provide useful returns by reducing the resources needed to respond to regulatory enquiries, and the risk of suffering reputational damage.

This very much fits in with what we see across the financial services domain: businesses striving to ensure compliance with the avalanche of regulations, and looking for new ways to drive effectiveness, sustainability and proactivity across the compliance function.

The opportunity: Reinvent how financial services addresses compliance.

This needs to embrace all the fundamentals, including communications capture, records retention, data governance and analysis, trade surveillance, infrastructure monitoring, and compliance automation. Simplifying, modernizing and automating these essential elements offers practical, robust and holistic solutions to help ensure compliance and reduce risk.

And there is a growing imperative to exploit: the power of automation.

For instance, monitoring and verifying the successful capture of voice and other interaction data can consume significant manpower and resources. But the latest, automated software solutions can carry out comprehensive testing of communications and recording systems, as well as manage eComms-surveillance, data management, policy enforcement and check that 100% of required interaction data has been captured across multiple communication channels.

Question: How many compliance officers would you need to achieve such levels of monitoring, testing and verification–if done manually, 24/7?

In its work to reinvent financial compliance, Verint is embracing all these possibilities and more.

  • We’re adopting and implementing open standards for data capture and operational systems, making sourcing, aggregating and analysing data much easier.
  • Easing the burden of complying with multiple, complex regulations, with capabilities that recognise and proactively act upon the requirements of the regulations–thus preventing compliance issues and smoothing the flow of business.
  • And we’re working to help overcome the challenges of internal structures, by capturing all the additional communication modes offered by Unified Communications (UC) and thereby unlocking the power of online collaboration.

If you want to know more about how Verint and its partners have reinvented compliance for the financial services world, attend one of the free Financial Compliance Innovation Workshops that will be held at venues around the world from October to February next year. In addition to fascinating keynote speakers and presentations on best-practice and leading-edge business solutions, there will be hands-on demonstrations and an opportunity to talk with some of the most experienced compliance technology experts in the industry.

Like Madonna, financial services businesses have the opportunity to reinvent compliance so that it probably would not be recognised by its former self.

Originally posted on Verint Connect.

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